The goal of a social enterprise is to create positive social change.
To sustain its social impact it has to make enough money to pay all its expenses… in order to remain financially viable, correct?
Would you believe that a $50K investment in a financially unsustainable social enterprise (generating revenue that never exceeds 80% of its costs) can still create more than four times the social impact than making the same donation to charity, while at the same time creating more than $360K in retained earnings, keeping the business in operation over 22 years without any further investment?
There is a strong case to make a social investment in a business that doesn’t break even. If your investment goals are to create social change, then better to invest in a business that can use your money to multiply the social benefit.
Read my guest blog post at SEEChange Magazine for the full story and calculations.